Gränges AB (publ)

Good morning, ladies and gentlemen, and welcome to this presentation of the first quarter result for Grengis. My name is Jørgen Rosengren, I'm Grengis' CEO, and I'm here with Oskar Hellström, our CFO, and we will be taking you through this presentation today. The first quarter of 2023 is one we're very happy with, very proud of, and we achieved in this quarter an operating profit on a record level and also quite a strong cash flow. Speaking first about demand, we saw lower demand in the first quarter of this year than we did in the very strong first quarter of last year. But we compensated for that slightly lower demand then by high sales activity and reached therefore marked recovery actually of about 10% relative to the last quarter of last year to 120,000 tons, which is then about 5% down from the same quarter last year.

We also made good progress on our strategic plan for sustainable growth, which we call Navigate, both on the commercial part of it, but also on the sustainability part of it. which I'll also talk a little bit more about in a minute. And to make investments in that plan, we also have, of course, to be capital efficient where we can. And therefore, it's good to see that in the quarter, we had a good reduction of capital intensity, which drove a strong cash flow and also improved leverage. Then, of course, we're in inflation times, so we did see quite large cost increases in the quarter, but managed to offset those with price and with productivity efforts. And the result of all of this, of course, is that we were able then to produce our best ever adjusted operating profit of 401 million SEC as compared to 331 last year.

Looking then a little bit further into the market, we had sequential volume recovery, like I said before, but a year-over-year decline. And the demand was different in our different segments and also in our different reporting areas. Firstly, in Americas, then, we had a rather strong decline in HVAC, where our customers are shifting foot, you could say, from growth and trying to get all the material that they possibly can to destocking and a more conservative approach to the market. which we were able to park our set with sales effort. In packaging, the story is a little bit different. Our customers saw a large influx of very low-priced materials from Asia, competing with them, and that led them to reduce their price.